Havilah Resources (ASX: HAV) has completed a site survey over the Maldorky iron ore deposit in northeastern South Australia that has not identified any visual sites of cultural significance that would prevent development.

The survey was carried out in conjunction with representatives of the Wilyakali people, who indicated that mining of the Maldorky deposit was likely to be acceptable provided due care was taken to respect the cultural and heritage values of the area.

Havilah's next task is to negotiate a native title mining agreement with the Wilyakali people over the Maldorky deposit to formalise the obligations and benefits for each side going forward.

A draft agreement is being prepared and will be provided to the Wilyakali legal representatives for consideration in due course.

"We take our relationship with the native title claimants seriously as we will have a lot of work to do with them over coming years on our various projects, including Maldorky, Grants, Mutooroo, Wilkins and Lilydale, all of which lie on the Wilyakali people's claim area," chairman Dr Bob Johnson said.

"We are genuine in our desire to see real benefits from our mining activities flow directly to the Wilyakali people, especially via training and employment opportunities.

"Fortescue Metals' sustainable business development model with aboriginal groups in the Pilbara region is a wonderful example of what can be achieved with a positive and co-operative attitude.

"We recognise that the Wilyakali people are an untapped source of potential employees who live in the area and who are keen to work."

Johnson added that technical director Dr Chris Giles' efforts in establishing a mutually respectful relationship with the Wilyakali people had set a good framework for the future, which will be critical to Havilah building its mines within their native title claim area.

Site survey

The chief objective of the survey was to check earlier drill sites and ground disturbance that Havilah had undertaken prior to lodgement of the Wilyakali native title claim in early 2012.

No visual cultural sites were identified during the survey though there was insufficient time to clear areas proposed to be occupied by surrounding mining related infrastructure, including tailings dam, camp, raw water dam and waste stock pile.

Future surveys will be conducted to clear these areas and also prior to any further drilling or sampling required for tailings dam design work.

Maldorky

Havilah has been working to obtain key metallurgical data on bulk iron ore samples to assist in the design of a processing plant capable of upgrading the iron ore from mining grades of about 30% to a consistent saleable grade of more than 60%.

The deposit, which was discovered in 2011, has a Resource of 147 million tonnes at 30.1% iron from surface.

The shallow deposit presents favourable mining economics with life of mine strip ratio estimated at just 0.19.

Capital expenditure has been estimated at $50 million while production costs are anticipated to be about $69 per tonne including rail transport to Port Adelaide and Government royalty payments.

Analysis

The site survey results and positive indications given by the native title claimants - the Wilyakali people - could ease the way for Havilah Resources as it prepares a Native Title Agreement.

This will in turn allow the company to resume work on the Maldorky iron ore deposit, which has favourable mining economics, as well as other projects such as Maldorky, Grants, Mutooroo, Wilkins and Lilydale that lie in the same claim area.

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